Siemens Delays Osram Lighting Unit IPO as Markets Retreat

Siemens Delays Osram Lighting Unit IPO
Siemens AG delayed an initial public offering of its Osram lighting unit that was planned in the coming weeks, following a slump in global equity markets. Photographer: Chris Ratcliffe/Bloomberg

Siemens AG delayed an initial public offering of its Osram lighting unit that was planned in the coming weeks, following a slump in global equity markets.

Siemens is “firmly holding” to the planned sale, the Munich-based engineering company said in a release. It didn’t specify when a new opportunity might arise, saying the timing of a listing depends on “the stabilization of market conditions.” Siemens had previous targeted “the fall” of 2011.

The German company had sought to separate the division as Chief Executive Officer Peter Loescher narrows the portfolio to energy, health-care equipment and infrastructure. Osram, the world’s second-largest maker of lighting, could better capture growth independently in an industry moving from traditional bulbs to light-emitting diodes, Siemens has said.

“Preparations are on track and will be continued,” Siemens said in the statement today. “The parent company remains committed to retaining a minority stake in Osram AG as an anchor shareholder over the long term.”

Long-Term Relationship

Osram has been part of Siemens’s product portfolio for almost a century. The unit generated sales of 4.68 billion euros ($6.42 billion) last year and operating profit of 569 million euros. Osram has a market value of about 3.2 billion euros, Metzler Equity Research estimated in a Sept. 13 note.

The holdup on Osram follows the delays of other initial public offerings amid market volatility. Evonik Industries AG, a German specialty chemicals company, probably will push its planned listing to the end of the year or the start of 2012, three people familiar with the plan said last week. The listing would have been the biggest in Germany in a decade.

Groupon Inc., which makes most of its revenue selling daily deals for restaurants, hotels and other merchants, filed earlier this year to raise $750 million in an IPO and postponed the sale because of the volatile stock market, people familiar with the matter said earlier this month.

“It’s not a terrible surprise,” Ben Uglow, an analyst at Morgan Stanley in London, said of the delayed Osram IPO.

Siemens, Germany’s biggest company by market capitalization, has fallen about 28 percent in value since the beginning of the year. That puts the stock on target for its first annual decline in three years. Germany’s benchmark DAX Index has lost about 24 percent this year.

The lighting industry has suffered from higher raw-material costs and increased competition from companies in Asia. Royal Philips Electronics NV, the industry leader, on July 18 cut its outlook for sales growth in the global lighting market to as little as 5 percent a year until 2015 from as much as 9 percent.

Osram, run by Wolfgang Dehen, is listed as a discontinued operation in Siemens’s accounts. The company, whose name is derived from the materials osmium and wolfram traditionally used in light bulbs, employs about 39,000 people globally.

Siemens hired Goldman Sachs Group Inc., Deutsche Bank AG and UBS AG to manage the share sale of Osram.